Beleaguered Restaurant Brands (RBD), which owns the KFC, Starbucks and Pizza Hutt franchises in New Zealand, took another punch on the nose today, reporting that half year net profit after tax was down 14.7% or $4.6 million on the previous year.

Reported profit including non-trading items was down 47.3% or $2.4 million on the previous year.

Restaurant Brands shares have dipped 1c in light trading this morning, indicating that the market is used to the bad news.

KFC continues to be the “shining light” in the otherwise underwhelming portfolio, which saw overall revenues decline 1.1% on the previous year to $162.5 million. A 4.0% improvement in KFC sales was offset by a $5.9 million or 14.7% reduction in Pizza Hut revenues. Same store sales, however, continued to grow at 0.9% for the half.

Restaurant Brands blames a shrinking pizza market and “continued aggressive competitor activity” for the continuing decline in Pizza Hut sales, which is being squeezed at the top and the bottom of the market by Hell and Dominos respectively.

Pizza Hut sales were down 9.4% on a same store sales basis and 14.7% in total for a total of $34.6 million for the half.

Restaurant Brands claims that no one is winning in the pizza market at present, citing “continuing evidence that Pizza Hut’s competitors are also struggling with their profitability” and appears to be adopting the same strategy that has worked for it in the past when aggressive new competitors squeezed its bottom line – wait them out using the earnings from KFC as a cushion.

The directors are continuing to explore options for flicking the business, discussing “alternative operating and ownership options for the brand” with the franchisor.

Starbucks’ result was fairly flat, down from $17.4 million last year to $17.3 million this year, with two stores closed.

While same store sales were up 4.4%, increased food, milk and labour costs ate into margins.

Restaurant Brands directors defended their performance, saying “Whilst the overall result is below prior year, (we) are satisfied that this is an acceptable outcome in a tough retail environment with continuing inflationary pressures on input costs.”

They (somewhat optimistically) expect that with no significant down turn in current economic conditions, the company will produce an NPAT (excluding non-trading items) in the vicinity of $9-10 million for the full year.

Directors have declared a fully imputed interim dividend of 3.0 cents per ordinary share payable on November 21, 2008, the same level as last year.